Tea Nguyen, DPM (00:00.526)

What if I told you that the risky move to direct care is actually simpler? It requires less infrastructure and carries less risk than staying in an insurance-based practice. To give you some context, I transitioned out of insurance in 2022, which was about three some years ago, and I came from an insurance dependent practice. In my first year of practice, I thought that I was doing everything right.

I hired the staff, I gave them a competitive benefit. I had all of the stuff that consultants would tell me to do. purchasing like an ultrasound in order to build better, for example, I went to conferences that focused on billing and coding and I really didn't miss a beat. Everything I needed to learn, I was on top of. But then a year went by and the reimbursements just were not coming in. I was waiting on checks. I was waiting for that direct deposit and then I suddenly found myself unable to pay off my credit card debt and this was the first time in my life where I felt like I had no control of the money coming in and leaving in the way of what things just cost to run a business. So shortly after I had my insurance-based practice

I could not figure out how to make more money no matter how many more patients I saw, no matter how many different billing strategies I utilized, I just couldn't figure it out. And I felt like a total failure. And it wasn't until I decided to make the leap out of insurance and just say, what's the worst that can happen? Because I was literally in the worst place I have ever experienced in my professional life. I was not making money.

But of course there is good news. I'm on the other side. And during that transition period of opting out of insurance, it can feel really painful. It can feel very scary not knowing what to expect. And now that I've healed from the trauma of working for insurance, of having to deal with my own setbacks, I really get the opportunity to look back and ask this question. What is the real cost of staying exactly where I was.

Tea Nguyen, DPM (02:22.402)

And that's a question that I pose to you too. You're here because you want something different. You're not happy with what's going on. In fact, most of us are terribly unhappy, but we don't know what to do or we're scared of the unknown. So here are the three shifts that will challenge everything you've ever been told about what it takes to run a successful practice. With the first hand account, of I've had to go through so that you don't have to go through it as well. This is the shortest path to your success is to learn from other people who've made their mistakes because look, back then there was no podcast. There weren't a lot of guidance who wasn't going to charge me an arm and a leg to get that professional help. I really had to scrap around. I mean, I did pay for professional help, but it just wasn't in alignment with where I was going. So they were great for other people, but it wasn't great for me.

And so here I'm going to share with you the three shifts you have to make in order for this to work for you rather than against you. 

The first thing is we've all been conditioned to believe that running a practice requires this huge infrastructure because the point where the patient finds the doctor to when the doctor sees the patient and then gets paid is very convoluted. There are billing departments, there are credentialing processes.

There's prior authorization teams and even coding experts and collection staff all in an effort to manage the money that goes from the patient through this intermediary, the third party, and then finally trickles down to you where you get maybe 20 % of what you bill. And for others, you're just paid a salary and that leaves you with not a lot of control as to how the money flows. And the reality is direct care is fundamentally simpler than insurance-based practices simply because we remove that middleman. That means we get rid of the billing departments. That means we don't ever have to look at a denied claim or do any prior authorizations. We don't have to fight for reimbursements. And when you get rid of all of that, all of that noise, your overhead drops dramatically. Most doctors are telling me they are seeing a reduction

Tea Nguyen, DPM (04:40.384)

in their administrative costs by 50 to 70%. What does that mean? That means that the rest of what you do make becomes profit. You have a bigger profit margin while you see fewer patients. So in the direct care practice, the patient shows up, you tell them your fees, they pay you, check cash, credit card on the same day. You keep that money, you pay what you need to pay in your overhead, which includes your salary, the internet, utilities, and the rent, and an assistant if you have that. And that's it. And I can tell you when I was in the insurance model, which you might be in as well, you're having to see 20, 30 patients a day, and each patient interaction requires some form of billing and coding and charting. And that ends up taking up your time with the patient. So patients are now experiencing these seven minute clinics.

Whereas in a direct care practice, I'm spending 30 minutes, 60 minutes with the patient and really getting down to what they need to do in order to get better. When we don't make that time for the patient, they're leaving the office confused. They go online, they Google stuff, they find a lot of misinformation and they don't get better.

Time is the thing that can help people heal, but in the insurance model, there just isn't enough of it. And therefore, you have to see volumes of patients. And on top of that, we have to multiply the administrative work it takes to see each patient. So if you have an add-on patient, for example, it's not just that 15-minute slot. You also have to make time to chart correctly, to build correctly, to make sure it's submitted correctly to wait on whether or not it will be denied based on other factors like a co-insurance, deductible, all the things related to insurance. Insurance-based medicine is just messy for private practice. So when doctors are choosing direct care, they are choosing to leave that complexity where you can gain the autonomy to practice medicine again the way that you want to.

Tea Nguyen, DPM (06:58.976)

And patients pay you directly for that and there's just really no issue. It's like any other business that exists other than the business of medicine. Shift number two, thinking that you need to have everything perfectly lined up before you start is a sure way to never start. There's just so much to know out there. And with medicine, yes, we had to be prepared in order to perform a procedure or a surgery. That makes sense. 

But that's not business. We are in the business world now and we're not in the operating room. So business is all about experimenting, testing things out and then refining. So when you wait for the perfect timing, you're just delaying your success. My analogy is like, you can read all day about how to swim, but to actually know how to swim, you got to get in the water. You got to dive in with your whole body to know what it feels like to be there.

And I was just talking to a doctor who said or who was adamant about taking out a business loan to start his practice. And it was a huge lump sum. And I said, that's fine. If you feel confident that you can pay it off without stress, do what you got to do. But if you want to start a direct care practice, you really don't need all that much. You need what we call a minimal viable practice. This is the framework, the MVP, minimal viable practice, the bare minimum that's needed to see your first patient.

So what is the minimal viable practice? What's really needed to see your first patient? Now realize your first patient is usually a consultation. You don't just jump in and do a procedure or you do a surgery in the first encounter. It takes time to build trust, to work through a plan for the patient. Oftentimes they're coming to you at various stages. It could be an acute problem that will eventually self resolve, or it could be a chronic problem that requires time to get them on the right path.

And what that means is your first few patient encounters may not necessarily need all of the equipment you think you need. So what are the core essentials? Well, you need a way for patients to find you. So that could be a website or your social media. You got to figure out how to put them on the schedule. And if you want to be old school, you can write it down in a notebook or you can get an EMR that does that easily for you. need a way to collect payment. Cash is great. People still write checks. You can do Venmo.

Tea Nguyen, DPM (09:26.498)

Of course just have some considerations for HIPAA, details of that can come later, but you can start accepting payments as is or you can sign up for Stripe and Square. Sometimes those are integrated in your EMR, but again it's not a whole lot that you need and then a way to document. Some people choose to document in Google Docs, the business edition, while others are using EMRs. That's all you really need. If you're a telehealth practice,

That's literally all you need. Of course, you need the essentials like business insurance and so on. But if you have an in-office practice, you may just need to rent one room until you build up the volume to see more patients. So that is the minimum viable practice. The space to see them, a way for them to find you, a way to get paid, and then your charting or documentation, e-morph software. That's really it.

In the beginning of your business, you're just having lots of conversations. And even before you decide to open, I would encourage you to continue to have these conversations with your potential referral resources. Now the things that we think we need that you don't actually need to see patients are things like a really nice logo, a beautiful website, a huge catalog of all of the services you offer, or a huge marketing budget. Now you can.

But if you are financially conscious and you want to do this in a smart way that doesn't strain you in the first few months as you're building your practice, I would highly recommend that you focus with one service package that solves one specific problem for one type of patient until you hit your $100,000 of cashflow in your direct care practice. This was actually something that I did in my practice when I shifted out of insurance where I was providing a non-covered medical service and I just packaged it to like 12 visits a year which is going to be a discounted rate compared to seeing me per visit or as needed. That did a few things for me. Number one, it provided me with financial stability. Number two, it encouraged long-term relationships with patients. And number three, it just made my life so much easier because

Tea Nguyen, DPM (11:45.792)

I knew exactly how to work that protocol to streamline it and to also train my staff to take those patients in. This is why they say there are riches in niches, being very specific in what you offer and offering just a few services until you get financial stability and then you can make more decisions when you get there. So your minimal viable practice gets you to your desired revenue faster and it costs a lot less.

Instead of trying to wait to have everything in line before you build up, progress will always be perfection every single time. That is a business concept that you must adopt in order for direct care to work for you. And lastly, shift number three you must have is the perception of risk. There is risk in leaving insurance, but there's also a risk in staying the same. I know you're thinking about what if patients don't pay or what if I can't make it work?

And the thing is, if you stay the same, there is a guarantee of burning out. There's a guarantee that reimbursements will continue to go down. There's a guarantee that the price of running a business goes up. And at the end of all that, you still don't have true autonomy. You are still beholden to those insurance contracts. So the question isn't, is direct care risky? It's which one of these risks can I actually live with? Which one will allow me to evolve?

To have a better life for all that I've already worked for. And here's the real risk assessment. The risk of staying the same, burnout, you lose profits, margins are shrinking, more patients and they're paying less, more administrative burden, that never goes away. And eventually a lot of us just lose joy in practicing medicine or we decide to leave clinical practice entirely. Now the risk of transitioning, there is a learning curve. There is you learning what types of patients will actually value you and are willing and happily paying you. And of course, there's a period of income uncertainty. So what you can do in this situation is mitigate. You take small steps. You don't take drastic measures. I've heard of doctors opting out of all insurances because they were fed up and they could not stay financially viable. I'm not recommending you do that, but I do recommend one foot in front of the other. 

Tea Nguyen, DPM (14:11.841)

Prepare yourself by putting away money or finding other sources of income as a way to give you some mental stability as you build out your direct care practice. Many doctors start small, they're starting part time, where they're maintaining some insurances. This is the hybrid model during that transition. Many doctors choose to stay there. And there's a bunch of us like myself who choose to never look back to working for insurance because you just cannot predict that there could be success there. In fact, it's a lot more predictable to realize that they will keep paying you less and less over time because that becomes what is tolerated. And that's why we get paid so little is because most of us are just tolerating it. We are afraid of the uncertainty of leaving. So to mitigate those risks, as you would mitigate any kind of risk like doing surgery, your insurance will tell you to mitigate risk doing X, Y, and Z. You want to be able to build a financial runway. 

Understand your profit and loss, meaning what you're spending and what you're collecting, making sure you're never overspending, which is easy to do if this is not something you've done in the past. Just understanding what it truly costs to run a direct care practice will help you tremendously. And of course, connecting with other doctors. So I've set up a private Facebook group called the Direct Care Society that you're welcome to join and ask your questions there.

Wherever you're at, there is bound to be somebody who can help you. Your situation is not all that unique. I'm just sorry to say that, but in medicine, we all are struggling with the same thing, but the way we deal with it is just on a different timeline. Now I don't make a whole lot of guarantees. The few guarantees that I will make is number one, we will all die someday. I know that's morbid, but it's factual and it's true, but we can live a great life. Not waiting for that day, right?

The second guarantee that I have for you today related to this episode is that there is going to be pain if you choose to say the same. This is guaranteed. We've seen it. It's been documented historically, working for insurances just does not work for private practice. The challenges that you'll experience in direct care are temporary, but once you set yourself up, you connect with people who are already doing it.

Tea Nguyen, DPM (16:34.443)

You realize a lot of the problems you might be experiencing in business ownership are actually solvable when you take out the middleman causing a lot of the problems. So weigh down your two options honestly, heavily, and you're going to see that the choice becomes clear. So here are some action items for you. Number one, do a simplicity audit. List every administrative task that you're doing that's related to insurance.

Imagine a life without that. That's all you gotta do. Just imagine what life could be like if you didn't have to do all of that, because that does disappear when you have a direct care practice. Number two, define the minimal viable practice. Write out what it takes to see your first patient. And I bet you've had a lot of people ask you for a curbside consult and you didn't have all those things set up, did you? They had your number, they knew who you were, they knew what you did. That's all you really need to get started. And number three, sit down and write out the risk of staying the same, the pain that you're enduring compared to the risk of launching a direct care practice, knowing that a lot of the problems are solvable and imagining a life never having to deal with insurance problems ever again. Give yourself a timeline of three to five years to build this practice. Can you do that? Can you risk that temporary discomfort?

for a practice that can live with you for a lifetime. So in summary, take that complexity that you know now and realize there is a simpler way to practice medicine. Perfect your minimal viable practice over time. It doesn't have to be perfect today. This can take time. You're just building one brick at a time. And then weighing what you've got going on right now, the pain of staying the same and the benefits of being uncomfortable for a temporary period.

In order to get something that's longer lasting and sustainable.

I wanted to share with you, I'm making some updates to my signature online course called Launch Your Direct Specialty Care Practice in 12 Weeks. And I'm looking forward to announcing it when it's ready.

In the meantime, come hang out with me on the Facebook side or download the workbook that I put together for you so that you can take your ideas and putting pen to paper. 

Thank you so much for lending me your ears today. I'll catch you next week. Take care.